Earnings and economic news combined to lift the markets higher last week as the 3rd quarter earnings season began to ramp up. All five Major Markets climbed higher as the market experienced broad-based advances. The S&P 500 registered its third consecutive weekly gain as it traded within one point of its all-time high set back on July 26th.
This week will see over 850 companies report 3rd quarter earnings, of which 150 of those are in the S&P 500. Next week will then see the largest number of reports with over 1150 companies reporting.
In economic news, Existing Home Sales released on Tuesday missed expectations, falling 2.2% in September. Wednesday saw the release of the weekly Mortgage Applications and the monthly FHFA House price index. The mortgage composite index dropped 11.9% week over week, while the FHFA House Price Index managed to close higher, but below expectations. This news weighed on the sector, coming into Thursday’s monthly New Home Sales report. In further mixed news, New Homes sales came in slightly above expectations, however, August’s reading of 713,000 was revised downward to 706,000.
This economic news caused Real Estate to register the worst performance of the S&P 500 sectors. Meanwhile, Energy added over 4%, returning the segment back into positive territory for the year.
Finally, in Brexit news, Boris Johnson was forced to accept the EU’s offer for a January 31st, 2020 extension. This follows after the Commons voted to approve his deal, but not his timetable, last week.
EU Council President Donald Tusk characterized this as a “flextension”, meaning that the UK could leave the EU sooner, if a deal passed their parliament. Members of Parliament (MPs) have proposed an early general election in December with the hopes that yet another election would provide the voter support and members of parliament necessary to finally make Brexit a reality.
The S&P 500® Index is a capitalization index of 500 stock-designed to measure performance of the broad domestic economy through changes in the aggregate market value of stock representing all major industries.
The Dow Jones Industrial Average® (The Dow®), is a price-weighted measure of 30 U.S. blue-chip companies. The index covers all industries except transportation and utilities.
The NASDAQ Composite Index measures all NASDAQ domestic and international based common type stocks listed on The NASDAQ Stock Market. Today the NASDAQ Composite includes over 2,500 companies, more than most other stock market indexes. Because it is so broad-based, the Composite is one of the most widely followed and quoted major market indexes
The MSCI World Index, which is part of The Modern Index Strategy, is a broad global equity benchmark that represents large and mid-cap equity performance across 23 developed markets countries. It covers approximately 85% of the free float-adjusted market capitalization in each country and MSCI World benchmark does not offer exposure to emerging markets.
The MSCI Emerging Markets (EM) Index is designed to represent the performance of large- and mid-cap securities in 24 Emerging Markets countries of the Americas, Europe, the Middle East, Africa and Asia. As of December 2017 it had more than 830 constituents and covered approximately 85% of the free float-adjusted market capitalization in each country.
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Companies in the S&P 500 Sector Indices are classified based on the Global Industry Classification Standard (GICS®).